DETERMINANTS OF FINANCIAL STATEMENT FRAUD: TESTING THE FRAUD TRIANGLE THEORY, A STUDY OF PUBLIC COMPANIES LISTED ON THE INDONESIA STOCK EXCHANGE

MUSAROH - - (Management Department, Faculty of Economics and Business, Universitas Negeri Yogyakarta)
Nindya Nuriswati Laili (Management Department, Faculty of Economics and Business, Universitas Negeri Yogyakarta)
Mahendra Ryansa Gallen Gagah Pratama (Management Department, Faculty of Economics and Business, Yogyakarta State University)
Bintang Lazuardi Benteng Buana Muslim (Management Department, Faculty of Economics and Business, Yogyakarta State University)
Naning - Margasari (Management Department, Faculty of Economics and Business, Yogyakarta State University)
Helena Christia Deshediany (Management Department, Faculty of Economics and Business, Yogyakarta State University)

Jurnal Studi Manajemen Organisasi
Vol 23, No 1 (2026): 2026

This study aims to provide empirical evidence on the determinants of financial statement fraud among public companies listed on the Indonesia Stock Exchange by testing the Fraud Triangle theory. A causal associative research design was employed, utilizing a purposive sample of 76 companies, comprising 38 fraud and 38 non-fraud firms. Data were analyzed using binary logistic regression. The findings reveal that external pressure, proxied by Debt to Total Assets, and internal pressure, proxied by Earnings Per Share, have a positive and significant effect on the probability of financial statement fraud. Conversely, internal control, proxied by the proportion of independent commissioners, significantly reduces the likelihood of fraud. However, rationalization, indicated by auditor and director turnover, does not show a significant impact. This study provides valuable insights by highlighting that excessive debt, ambitious financial targets, and weak board oversight are primary drivers of fraud. It emphasizes the critical role of independent commissioners in corporate governance and advises investors to scrutinize company fundamentals